Client Services
Adoption Assistance Plans - Complimentary Model Plan Documents
Model Plan Document. Under Section 137 of the Internal Revenue Code, employer-provided adoption assistance benefits must be provided under a "written plan." Once the adoption assistance plan is implemented, benefits paid from the plan can qualify as nontaxable benefits under a salary-reduction Section 125 cafeteria plan.
Employee Communication: Plan Overview. It is very important to clearly explain to employees the specific benefits available under the terms of the plan. A written explanation or employee communication providing an overview of the plan is the most popular and effective way to do this.
Employee Communication: Tax Exclusion or Credit? Employee communications should also explain the differences between tax-favored adoption assistance benefits and the adoption tax credit. For some employees, the tax credit is a better choice than the income exclusion; for others the opposite is true. Given the high costs of the typical adoption today, most employees will be entitled to both the tax credit and the income exclusion (but not for the same adoption expenses). A written explanation can help explain these choices to an employee.
Claim form. A standard claim form for documenting employees' reimbursement requests is critical to efficient plan administration. This form may need slight modifications to make it consistent with the current format of your employee communications and benefits claims forms.
By clicking on the links below, you may view examples of all four of these documents. The plan documents are provided in model form, meaning that individual employers may customize them to fit their own situation, and to coordinate with their own existing cafeteria plan and benefits documents. For each document, both Word files (which can be edited) and HTML files (which cannot) are provided.
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Employee Communication: Plan Overview (available in HTML or Word)
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Employee Communication: Tax Exclusion or Credit? (available in HTML or Word)
